TSR Changes: Are Telemarketers Ready?

While the industry has focused on the national no-call registry during the past two months, an immediate challenge to telemarketers is coming in a host of new rules set to take effect March 30.

Various changes, part of the Federal Trade Commission's revamp of the Telemarketing Sales Rule, will affect upsells, use of pre-acquired account information, predictive-dialer use, billing procedures and disclosures. Some industry observers say many telemarketers have yet to get their houses in order.

"People are still scrambling as we speak," said Lewis Rose, an attorney with Collier Shannon Scott, who specializes in the TSR. "They're all getting it together with their scripts and everything else."

Most "legitimate" telemarketers will be ready by the March 30 deadline, Rose predicted. But not all telemarketers are sure the industry will have widespread readiness by the deadline. Joan Mullen, vice president of industry relations at Ron Weber and Associates Inc., recalled many drawn faces at a recent teleservices industry compliance seminar in which she detailed the rule changes.

"Some of them have been in denial," Mullen said. "Really, it hit them, what was going to be required."

The FTC granted telemarketers additional time to catch up with one of the rule changes affecting predictive-dialer use. Some in telemarketing have grumbled that trade organizations have spent more time and energy mounting legal challenges than they have educating membership about the changes.

"[The trade groups] are paying their lawyers a lot of money on hourly rates," Rose said. "Our clients are saying that they could've had regional seminars and more information. We've been very busy advising our clients."

The ATA and DMA have planned educational events for their members. The DMA held a teleconference on compliance last week while the ATA has planned a legislative conference March 24-26 in Washington and produced a side-by-side comparison of the old and revised TSRs for distribution to members.

The cost of complying with the new rules could be a killer for some smaller agencies that can't afford needed technology upgrades, telemarketing experts have said. Indeed, some telemarketing agencies have a positive view of the FTC's increased stringency, seeing their compliance with the rule changes as a way to gain an edge over competitors.

"If you're not ahead of the curve and ready for the changes, clients may go elsewhere for their business," said D.J. Cannava, vice president of client services and corporate development and general counsel for Miami Lakes, FL-based Inktel Direct. "Inktel views this as a business opportunity. We believe by the virtue of the fact that we are compliant, we're ahead of the curve."

Yet even if telemarketers are prepared technologically, the new rules are bound to cost them money, Rose said.

"Every phone call is going to be longer because the disclosures are more complex," Rose said. "You're going to have to have more people or handle less transactions per hour."

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